TASEKO
REPORTS IMPROVED COPPER PRODUCTION AND SECOND QUARTER 2023
FINANCIAL RESULTS
This
release should be read with the Company's Financial Statements and
Management Discussion & Analysis ("MD&A"), available
at
www.tasekomines.com and filed
on
www.sedar.com. Except
where otherwise noted, all currency amounts are stated in Canadian
dollars. Taseko's 87.5% owned Gibraltar Mine is located north of
the City of Williams Lake in south-central British Columbia.
Production and sales volumes stated in this release are on a 100%
basis unless otherwise indicated.
|
VANCOUVER, BC, Aug. 2, 2023 --
Taseko Mines Limited (TSX: TKO) (NYSE American: TGB) (LSE: TKO)
("Taseko" or the "Company") reports second quarter 2023 Adjusted
EBITDA* of $22 million, Earnings from
mining operations before depletion and amortization* of
$28 million and Cash flows provided
by operations of $33 million.
Adjusted net loss* was $4 million, or
$0.02 per share.
Gibraltar produced 28 million pounds of copper and 230
thousand pounds of molybdenum in the second quarter.
Copper
production was 13% higher than the prior quarter as a result of
higher grade, throughput and recoveries. Sales
for the second quarter were 26 million pounds of copper (100%
basis), slightly lower than the prior quarter, and also lower than
second quarter production due to an increase of inventory in
transit at the end of June.
Stuart McDonald, President and CEO of Taseko, commented
"Mining operations are now well established in the lower benches of
the Gibraltar pit, which have
higher grades and larger, more consistent ore
zones.
Low mill
availabilities had an impact on production in April and May, but in
June and July we benefited from the softer ore in the Gibraltar pit and mill throughput averaged
well above nameplate capacity.
Copper
production in June and July was 11 million pounds in each
month.
The
Gibraltar pit will be the sole
source of ore for the remainder of 2023.
With
increased copper production expected in the second half of the year
we continue to track towards our original production guidance of
115 million pounds of copper (+/-5%)."
"Total
site costs* at Gibraltar dropped
by $7 million over the previous
quarter due to lower diesel and other costs, although the impact of
cost reductions was partially offset by lower molybdenum prices
which reduced the by-product credit. Overall,
unit operating costs dropped to US$2.66 per pound of copper produced, 10% lower
than the first quarter, and is expected to decline further in the
second half of the year as production increases.
Capital
spending at Gibraltar was higher
than normal in the quarter as work continued on the in-pit crusher
relocation project and we completed a major component replacement
on one of our mining shovels, at a cost of $10 million. Work
on the in-pit crusher will wind down in the third quarter and the
project will be completed in the second quarter of 2024 when the
crusher is relocated," added Mr. McDonald.
Mr.
McDonald concluded, "At Florence Copper, the Environmental
Protection Agency ("EPA") is advancing its process for the
Underground Injection Control permit. Based
on our latest dialogue with the EPA, we believe they are close to
making a final permit decision. In
the meantime, we continue to advance discussions with potential
financing partners for the remainder of the project financing
package, which could include a copper royalty and/or a small
project loan. These transactions would complement the committed
funding from Mitsui, Bank of America, and our revolving credit
facility."
Second
Quarter Review
-
Second
quarter earnings from mining operations before depletion and
amortization* was $27.7 million,
Adjusted EBITDA* was $22.2 million,
and cash flows from operations were $33.3
million;
-
GAAP net
income was $10.0 million
($0.03 per share) and Adjusted net
loss* was $4.4 million ($0.02 loss per share) after normalizing for
unrealized foreign exchange gains
-
Gibraltar produced 28.2 million pounds of copper for the
quarter, a 13% improvement over the prior quarter as a result of
improved grades, recoveries and mill throughput;
-
Copper
head grades in the quarter were 0.24%, in line with expectations,
as mining progressed deeper in the Gibraltar pit;
-
Gibraltar sold 26.1 million pounds of copper in the second
quarter (100% basis) with sales lagging production due to an
increase of inventory in transit at the end of June;
-
Total site
costs* in the second quarter were $105.4
million on a 100% basis, $7.4
million lower than the previous quarter due to lower diesel,
explosive and contractor services costs;
-
As a
result of commodity price decreases in the quarter, the Company
wrote-down lower grade ore stockpile inventory to net realizable
values totalling $8.1 million (an
impact of approximately $0.03 per
share);
-
On
June 28, 2023, the Company entered
into a second amendment to its silver stream agreement with Osisko
Gold Royalties Ltd. and received $13.6
million in exchange for increasing the payable silver from
75% to 87.5% and increasing the threshold delivery amount of silver
for the additional mineral reserves published in 2022;
-
In June,
the Company amended its revolving credit facility to increase the
amount of credit approval of the facility from US$50 million to US$80
million with the addition of ING Capital LLC to the
syndicate of lenders;
-
The
Company had a closing cash balance of $86
million at June 30, 2023;
and
-
The B.C.
port labour strike in the first half of July
2023 did not have any impact on Gibraltar production but did restrict the
mine's ability to ship concentrate after the quarter end. The
backlog of Gibraltar concentrate
inventory is expected to be shipped in the second half of the
year.
*Non-GAAP performance measure. See end of news release
HIGHLIGHTS
Operating
Data (Gibraltar - 100% basis)
|
Three
months ended June 30,
|
Six
months ended June 30,
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
Tons mined
(millions)
|
23.4
|
22.3
|
1.1
|
47.5
|
42.6
|
4.9
|
Tons milled
(millions)
|
7.2
|
7.7
|
(0.5)
|
14.3
|
14.7
|
(0.4)
|
Production
(million pounds Cu)
|
28.2
|
20.7
|
7.5
|
53.1
|
42.0
|
11.1
|
Sales
(million pounds Cu)
|
26.1
|
21.7
|
4.4
|
52.7
|
49.1
|
3.6
|
Financial
Data
|
Three
months ended June 30,
|
Six
months ended June 30,
|
(Cdn$ in
thousands, except for per share amounts)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
Revenues
|
111,924
|
82,944
|
28,980
|
227,443
|
201,277
|
26,166
|
Earnings
from mining operations before depletion
and
amortization*
|
27,664
|
7,221
|
20,443
|
68,803
|
49,994
|
18,809
|
Cash flows
provided by operations
|
33,269
|
18,344
|
14,925
|
61,268
|
70,097
|
(8,829)
|
Adjusted
EBITDA*
|
22,218
|
1,684
|
20,534
|
58,277
|
39,823
|
18,454
|
Net income
(loss) (GAAP)
|
9,991
|
(5,274)
|
15,265
|
14,430
|
(179)
|
14,609
|
Per share –
basic ("EPS")
|
0.03
|
(0.02)
|
0.05
|
0.05
|
-
|
0.05
|
Adjusted
net income (loss)*
|
(4,376)
|
(16,098)
|
11,722
|
712
|
(9,936)
|
10,648
|
Per share –
basic ("adjusted EPS")*
|
(0.02)
|
(0.06)
|
0.04
|
-
|
(0.03)
|
0.03
|
*Non-GAAP performance measure. See end of news release
REVIEW
OF OPERATIONS
Gibraltar mine
Operating
data (100% basis)
|
|
Q2
2023
|
Q1
2023
|
Q4
2022
|
Q3
2022
|
Q2
2022
|
Tons mined
(millions)
|
|
23.4
|
24.1
|
22.9
|
23.2
|
22.3
|
Tons milled
(millions)
|
|
7.2
|
7.1
|
7.3
|
8.2
|
7.7
|
Strip
ratio
|
|
1.5
|
1.9
|
1.1
|
1.5
|
2.8
|
Site
operating cost per ton milled (Cdn$)*
|
|
$13.17
|
$13.54
|
$13.88
|
$11.33
|
$11.13
|
Copper
concentrate
|
|
|
|
|
|
|
Head grade
(%)
|
|
0.24
|
0.22
|
0.22
|
0.22
|
0.17
|
Copper
recovery (%)
|
|
81.9
|
80.7
|
83.4
|
77.1
|
77.3
|
Production
(million pounds Cu)
|
|
28.2
|
24.9
|
26.7
|
28.3
|
20.7
|
Sales
(million pounds Cu)
|
|
26.1
|
26.6
|
25.5
|
26.7
|
21.7
|
Inventory
(million pounds Cu)
|
|
5.6
|
3.7
|
5.4
|
4.2
|
2.7
|
Molybdenum
concentrate
|
|
|
|
|
|
|
Production
(thousand pounds Mo)
|
|
230
|
234
|
359
|
324
|
199
|
Sales
(thousand pounds Mo)
|
|
231
|
225
|
402
|
289
|
210
|
Per
unit data (US$ per pound produced)*
|
|
|
|
|
|
|
Site
operating costs*
|
|
$2.43
|
$2.94
|
$2.79
|
$2.52
|
$3.25
|
By-product
credits*
|
|
(0.13)
|
(0.37)
|
(0.40)
|
(0.15)
|
(0.15)
|
Site
operating costs, net of by-product credits*
|
|
$2.30
|
$2.57
|
$2.39
|
$2.37
|
$3.10
|
Off-property
costs
|
|
0.36
|
0.37
|
0.36
|
0.35
|
0.37
|
Total
operating costs (C1)*
|
|
$2.66
|
$2.94
|
$2.75
|
$2.72
|
$3.47
|
OPERATIONS
ANALYSIS
Gibraltar produced 28.2 million pounds of copper for the
second quarter, a 13% increase over the first quarter due to higher
mill throughput, ore grade and recoveries. As mining progressed
deeper into the Gibraltar pit, ore
grade and consistency improved which will continue for the
remainder of the year. Mill throughput was 7.2 million tons for the
period and was lower than planned due to mill downtime for
additional maintenance.
Copper
head grades of 0.24% were higher than recent quarters and in line
with management expectations as mining proceeds further into higher
grade ore benches in the Gibraltar
pit.
Copper
recoveries in the second quarter were 81.9% and improved with the
increasing head grades.
A total of
23.4 million tons were mined in the second quarter in line with
mine plan. The ore stockpiles increased by 0.7 million tons in the
second quarter and 1.7 million tons of oxide ore from the Connector
pit was placed on the heap leach pads. This oxide ore will be
processed in future years when Gibraltar's solvent extraction and
electrowinning ("SX/EW") plant is restarted.
*Non-GAAP performance measure. See end of news release
OPERATIONS
ANALYSIS - CONTINUED
Total site
costs* at Gibraltar of
$105.4 million were $7.4 million lower than last quarter due to a
number of factors including lower diesel fuel costs, purchased
electricity, natural gas, explosives and contractor
services.
Sustaining
capital expenditures in the quarter were $20.4 million and included $10.4 million for a major component replacement
on one of the shovels.
Gibraltar capital expenditures will decrease in the second
half of the year as preparatory work for the primary crusher move
is completed and with less equipment component replacements
expected.
Molybdenum
generated a by-product credit of US$0.13 per pound of copper produced in the
second quarter, which decreased significantly from the first
quarter. The molybdenum price decreased from the first quarter's
average price of US$32.79 per pound
to an average of US$21.30 per pound.
This decreased molybdenum price also resulted in negative
provisional price adjustments of $1.3
million in the second quarter.
Off-property
costs per pound produced* were US$0.36 and
were in line with recent quarters.
Total
operating costs per pound produced (C1)* were US$2.66 for the second quarter, compared to
US$3.47 in the same period in 2022
with key variances summarized in the bridge graph
below:
Photo
-
https://mma.prnewswire.com/media/2168355/Taseko_Mines_Limited_TASEKO_REPORTS_IMPROVED_COPPER_PRODUCTION_A.jpg
GIBRALTAR OUTLOOK
The
Gibraltar pit will continue to be
the sole source of mill feed for the remainder of 2023 and head
grade and ore quality are expected to be similar to Q2 for the
remainder of the year.
Second
quarter production was impacted by low mill availabilities in April
and May, but in June and July milling operations benefited from the
softer ore in the Gibraltar pit
and mill throughput averaged well above nameplate capacity of
85,000 tpd. Copper production in June and July was 11 million
pounds in each month. Management
continues to expect Gibraltar to
produce 115 million pounds (+/- 5%) of copper in 2023 on a 100%
basis.
*Non-GAAP performance measure. See end of news release
GIBRALTAR OUTLOOK - CONTINUED
The in-pit
crusher is now planned to be relocated in Q2 2024. This deferral of
the crusher move results in increased mill production in the
current year, and allows the timing of the crusher move to align
with a maintenance shutdown that is required for the Mill
#1 SAG
mill.
Strong
metal prices combined with our copper hedge protection continues to
provide stable operating margins at the Gibraltar mine. Copper prices in the second
quarter averaged US$3.84 per pound,
compared to the six month year to date average of US$3.95 and the 2022 average of US$3.99 per pound. The Company currently has
copper price collar contracts in place that secure a minimum copper
price of US$3.75 per pound for 35
million pounds of copper until December 31,
2023.
The
Company's copper concentrate transportation was recently impacted
by the strike action of port workers in British Columbia. The work stoppages by the
port workers has delayed shipment of concentrate to
customers.
Now that
the strike has been resolved, efforts are underway to move
stockpiled concentrate at site to the port using rail and
trucking.
Given the
backlog, concentrate inventory levels at site may not reduce to
normal levels until later this year.
ACQUISITION
OF ADDITIONAL 12.5% INTEREST IN GIBRALTAR
After
March 15, 2023, the financial results
of Taseko reflect its 87.5% beneficial interest in the Gibraltar mine.
The
Company completed the acquisition of an additional 12.5% interest
in the Gibraltar mine from Sojitz
on March 15, 2023. Gibraltar is operated through a joint venture
which is owned 75% by Taseko and 25% by Cariboo Copper Corporation
("Cariboo"). Under the terms of the agreement, Taseko has acquired
Sojitz's 50% interest in Cariboo and now holds an effective 87.5%
interest in the Gibraltar mine.
The other 50% of Cariboo is held equally by Dowa Metals &
Mining Co., Ltd. ("Dowa") and Furukawa Co. Ltd.
("Furukawa").
The
acquisition price consists of a minimum amount of $60 million payable over a five-year period and
potential contingent payments depending on Gibraltar mine copper revenues and copper
prices over the next five years. An initial $10 million has been paid to Sojitz on closing
and the remaining minimum amount will be paid in $10 million annual instalments over the next five
years. There is no interest payable on the minimum amounts and the
amounts payable to Sojitz are secured against shareholder loans
owing from Cariboo to Taseko.
The
contingent payments are payable annually for five years only if the
average LME copper price exceeds US$3.50 per pound in a year. The payments will be
calculated by multiplying Gibraltar mine copper revenues by a price
factor, which is based on a sliding scale ranging from 0.38% at
US$3.50 per pound copper to a maximum
of 2.13% at US$5.00 per pound copper
or above. Total contingent payments cannot exceed $57 million over the five-year period, limiting
the acquisition cost to a maximum of $117
million.
Taseko
became a party to the existing Cariboo shareholders agreement with
Dowa and Furukawa. There was no change to the offtake contracts
established in 2010 and Dowa and Furukawa will continue to receive
30% of Gibraltar's copper
concentrate offtake. There will be no impact to the operation of
the Gibraltar Joint Venture.
FLORENCE
COPPER
The
Company is awaiting the issuance of the final Underground Injection
Control ("UIC") permit from the U.S. Environmental Protection
Agency ("EPA"), which is the final permitting step required prior
to construction commencing on the commercial production facility.
On June 12, 2023, the EPA issued the
Programmatic Agreement ("PA") for signature which is a key step
required to finalize the NHPA Section 106 process and precedes
issuance of the final UIC permit.
Detailed
engineering and design for the commercial production facility is
substantially completed and procurement activities are well
advanced. The Company has purchased the major processing equipment
associated with the SX/EW plant and the equipment has now been
delivered to the Florence site. The Company is well positioned to
transition into construction once the final UIC permit is received.
The Company incurred $27.4 million of
capital expenditures at the Florence project in the first half of
2023.
In
March 2023, the Company announced the
results of recent technical work and updated economics for the
Florence Copper project. The Company has filed a new technical
report entitled "NI 43-101 Technical Report Florence Copper
Project, Pinal County, Arizona"
dated March 30, 2023 (the "Technical
Report") on SEDAR. The Technical Report was prepared in accordance
with NI 43-101 and incorporates updated capital and operating costs
for the commercial production facility and refinements made to the
operating models, based on the Production Test Facility ("PTF")
results.
The
technical work completed by Taseko in recent years has been
extensive and has de-risked the project significantly. The PTF
operated successfully over an 18-month period and provided a
valuable opportunity to test operational controls and strategies
which will be applied in future commercial operations. In addition,
a more sophisticated leaching model has been developed and
calibrated to the PTF wellfield performance. This detailed modeling
data, along with updated costing, has been used to update
assumptions for the ramp up and operation of the commercial
wellfield and processing facility.
Florence
Copper Project Highlights:
-
Net
present value of US$930 million
(after-tax at an 8% discount rate)
-
Internal
rate of return of 47% (after-tax)
-
Payback
period of 2.6 years
-
Operating
costs (C1) of US$1.11 per pound of
copper
-
Annual
production capacity of 85 million pounds of LME grade A cathode
copper
-
22 year
mine life
-
Total life
of mine production of 1.5 billion pounds of copper
-
Total
estimated initial capital cost of US$232
million remaining
-
Long-term
copper price of US$3.75 per
pound
LONG-TERM
GROWTH STRATEGY
Taseko's
strategy has been to grow the Company by acquiring and developing a
pipeline of complementary projects focused on copper in stable
mining jurisdictions. We continue to believe this will generate
long-term returns for shareholders. Our other development projects
are located in British
Columbia.
LONG-TERM
GROWTH STRATEGY - CONTINUED
Yellowhead
Copper Project
Yellowhead
Mining Inc. ("Yellowhead") has an 817 million tonnes reserve and a
25-year mine life with a pre-tax net present value of $1.3 billion at an 8% discount rate using a
US$3.10 per pound copper price based
on the Company's 2020 NI 43-101 technical report. Capital costs of
the project are estimated at $1.3
billion over a 2-year construction period. Over the first 5
years of operation, the copper equivalent grade will average 0.35%
producing an average of 200 million pounds of copper per year at an
average C1* cost, net of by-product credit, of US$1.67 per pound of copper. The Yellowhead
copper project contains valuable precious metal by-products with
440,000 ounces of gold and 19 million ounces of silver with a life
of mine value of over $1 billion at
current prices.
The
Company is preparing to advance into the environmental assessment
process and is undertaking some additional engineering work in
conjunction with ongoing engagement with local communities
including First Nations. The Company is also collecting baseline
data and modeling which will be used to support the environmental
assessment and permitting of the project.
New
Prosperity Gold-Copper Project
In late
2019, the Tŝilhqot'in Nation, as represented by Tŝilhqot'in
National Government, and Taseko entered into a confidential
dialogue, with the involvement of the Province of British Columbia, in order to obtain a
long-term resolution of the conflict regarding Taseko's proposed
copper-gold mine previously known as New Prosperity, acknowledging
Taseko's commercial interests and the Tŝilhqot'in Nation's
opposition to the project.
This
dialogue has been supported by the parties' agreement, beginning
December 2019, to a series of
one-year standstills on certain outstanding litigation and
regulatory matters relating to Taseko's tenures and the area in the
vicinity of Teẑtan Biny (Fish Lake). The standstill agreement was
most recently extended for a fourth one-year term in December 2022, with the goal of providing time
and opportunity for the Tŝilhqot'in Nation and Taseko to negotiate
a final resolution.
The
dialogue process has made tangible progress in the past 12 months
but is not complete. In agreeing to extend the standstill through
2023, the Tŝilhqot'in Nation and Taseko acknowledge the
constructive nature of discussions to date, and the future
opportunity to conclude a long-term and mutually acceptable
resolution of the conflict that also makes an important
contribution to the goals of reconciliation in Canada.
Aley
Niobium Project
Environmental
monitoring and product marketing initiatives on the Aley niobium
project continue. The converter pilot test is ongoing and is
providing additional process data to support the design of the
commercial process facilities and will provide final product
samples for marketing purposes. The Company has also initiated lab
testwork on flowsheet development to produce niobium oxide from
floatation concentrate at Aley to supply the growing market for
niobium-based batteries.
ANNUAL
ENVIRONMENT, SOCIAL & GOVERNANCE
REPORT
On
May 25, 2023, the Company published
its annual Environment, Social & Governance ("ESG") Report,
titled 360o of
Value. The report focuses on the 2022 operational and
sustainability performance of Taseko's foundational asset, the
Gibraltar copper mine in
British Columbia, and reports on
the Company's enterprise-wide ESG impacts and benefits – including
environmental initiatives, social contributions, governance
programs and greenhouse gas emissions.
While
profitable operations and return on investment are critical drivers
for Taseko's success, the Company also delivers value to its
employees and operating communities, business partners, Indigenous
Nations and governments. The annual ESG report is an opportunity to
showcase the
important benefits that the Company generates through its
operations, investments and people:
-
Well-paid
jobs and career opportunities for employees;
-
Healthy
and safe workplaces that welcome a diversity of people and
views;
-
Support
for vibrant communities and institutions;
-
Protection
and conservation of important environmental values, such as
wildlife, biodiversity, clean air and water;
-
Meaningful
partnerships with Indigenous people;
-
Financial
support for important government services and programs;
and
-
The
production of copper and other metals that play such an important
role in supporting modern society and enhancing quality of
life.
The full
report can be viewed and downloaded at tasekomines.com/esg/overview.
The
Company will host a telephone conference call and live webcast on
Thursday, August 3, 2023 at
11:00 a.m. Eastern Time (8:00 a.m. Pacific) to discuss these
results.
After
opening remarks by management, there will be a question and answer
session open to analysts and investors.
To join
the conference call without operator assistance, you may
pre-register at https://emportal.ink/46Kh6Zm to
receive an instant automated call back just prior to the start of
the conference call. Otherwise, the conference call may be accessed
by dialing 888-390-0546 toll free, 416-764-8688 in Canada, or online at
tasekomines.com/investors/events.
The
conference call will be archived for later playback until
August 17, 2023 and can be accessed
by dialing
888-203-1112
toll free, 416-764-8677 in Canada,
or online at tasekomines.com/investors/events and
using the entry code 191584#.
No
regulatory authority has approved or disapproved of the information
in this news release.
NON-GAAP
PERFORMANCE MEASURES
This
document includes certain non-GAAP performance measures that do not
have a standardized meaning prescribed by IFRS. These measures may
differ from those used by, and may not be comparable to such
measures as reported by, other issuers. The Company believes that
these measures are commonly used by certain investors, in
conjunction with conventional IFRS measures, to enhance their
understanding of the Company's performance. These measures have
been derived from the Company's financial statements and applied on
a consistent basis. The following tables below provide a
reconciliation of these non-GAAP measures to the most directly
comparable IFRS measure.
Total
operating costs and site operating costs, net of by-product
credits
Total
costs of sales include all costs absorbed into inventory, as well
as transportation costs and insurance recoverable. Site operating
costs are calculated by removing net changes in inventory,
depletion and amortization, insurance recoverable, and
transportation costs from cost of sales. Site operating costs, net
of by-product credits is calculated by subtracting by-product
credits from the site operating costs. Site operating costs, net of
by-product credits per pound are calculated by dividing the
aggregate of the applicable costs by copper pounds produced. Total
operating costs per pound is the sum of site operating costs, net
of by-product credits and off-property costs divided by the copper
pounds produced. By-product credits are calculated based on actual
sales of molybdenum (net of treatment costs) and silver during the
period divided by the total pounds of copper produced during the
period. These measures are calculated on a consistent basis for the
periods presented.
(Cdn$ in
thousands, unless otherwise indicated) –
75% basis
(except for Q1 and Q2 2023)
|
2023
Q21
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
Cost of
sales
|
99,854
|
86,407
|
73,112
|
84,204
|
90,992
|
Less:
|
|
|
|
|
|
Depletion
and amortization
|
(15,594)
|
(12,027)
|
(10,147)
|
(13,060)
|
(15,269)
|
Net change
in inventories of finished goods
|
3,356
|
(399)
|
1,462
|
2,042
|
(3,653)
|
Net change
in inventories of ore stockpiles
|
2,724
|
5,561
|
18,050
|
3,050
|
(3,463)
|
Transportation
costs
|
(6,966)
|
(5,104)
|
(6,671)
|
(6,316)
|
(4,370)
|
Site
operating costs
|
83,374
|
74,438
|
75,806
|
69,920
|
64,237
|
Oxide ore
stockpile reclassification from capitalized stripping
|
(3,183)
|
3,183
|
-
|
-
|
-
|
Less
by-product credits:
|
|
|
|
|
|
Molybdenum,
net of treatment costs
|
(4,018)
|
(9,208)
|
(11,022)
|
(4,122)
|
(3,023)
|
Silver,
excluding amortization of deferred revenue
|
(103)
|
(160)
|
263
|
25
|
36
|
Site
operating costs, net of by-product credits
|
76,070
|
68,253
|
65,047
|
65,823
|
61,250
|
Total
copper produced (thousand pounds)
|
24,640
|
19,491
|
20,020
|
21,238
|
15,497
|
Total costs
per pound produced
|
3.09
|
3.50
|
3.25
|
3.10
|
3.95
|
Average
exchange rate for the period (CAD/USD)
|
1.34
|
1.35
|
1.36
|
1.31
|
1.28
|
Site
operating costs, net of by-product credits
(US$
per pound)
|
2.30
|
2.59
|
2.39
|
2.37
|
3.10
|
Site
operating costs, net of by-product credits
|
76,070
|
68,253
|
65,047
|
65,823
|
61,250
|
Add
off-property costs:
|
|
|
|
|
|
Treatment
and refining costs
|
4,986
|
4,142
|
3,104
|
3,302
|
2,948
|
Transportation
costs
|
6,966
|
5,104
|
6,671
|
6,316
|
4,370
|
Total
operating costs
|
88,022
|
77,499
|
74,822
|
75,441
|
68,568
|
Total
operating costs (C1) (US$ per pound)
|
2.66
|
2.94
|
2.75
|
2.72
|
3.47
|
1 Q1
and Q2 2023 includes the impact from the March 15, 2023 acquisition
of Cariboo from Sojitz, which increased the Company's Gibraltar
mine ownership from 75% to 87.5%.
|
NON-GAAP
PERFORMANCE MEASURES - CONTINUED
Total
Site Costs
Total site
costs are comprised of the site operating costs charged to cost of
sales as well as mining costs capitalized to property, plant and
equipment in the period. This measure is intended to capture
Taseko's share of the total site operating costs incurred in the
quarter at the Gibraltar mine
calculated on a consistent basis for the periods
presented.
(Cdn$ in
thousands, unless otherwise indicated) –
75% basis
(except for Q1 and Q2 2023)
|
2023
Q21
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
Site
operating costs
|
83,374
|
74,438
|
75,806
|
69,920
|
64,237
|
Add:
|
|
|
|
|
|
Capitalized
stripping costs
|
8,832
|
12,721
|
3,866
|
1,121
|
11,887
|
Total
site costs – Taseko share
|
92,206
|
87,159
|
79,672
|
71,041
|
76,124
|
Total
site costs – 100% basis
|
105,378
|
112,799
|
106,230
|
94,721
|
101,500
|
1 Q1
and Q2 2023 includes the impact from the March 15, 2023 acquisition
of Cariboo from Sojitz, which increased the Company's Gibraltar
mine ownership from 75% to 87.5%.
|
Adjusted
net income (loss)
Adjusted
net income (loss) removes the effect of the following transactions
from net income as reported under IFRS:
-
Unrealized
foreign currency gain/loss;
-
Unrealized
gain/loss on derivatives; and
-
Finance
and other non-recurring costs.
Management
believes these transactions do not reflect the underlying operating
performance of our core mining business and are not necessarily
indicative of future operating results. Furthermore, unrealized
gains/losses on derivative instruments, changes in the fair value
of financial instruments, and unrealized foreign currency
gains/losses are not necessarily reflective of the underlying
operating results for the reporting periods presented.
(Cdn$ in
thousands, except per share amounts)
|
2023
Q2
|
2023
Q1
|
2022
Q4
|
2022
Q3
|
Net
income (loss)
|
9,991
|
4,439
|
(2,275)
|
(23,517)
|
Unrealized
foreign exchange (gain) loss
|
(10,966)
|
(950)
|
(5,279)
|
28,083
|
Unrealized
(gain) loss on derivatives
|
(6,470)
|
2,190
|
20,137
|
(72)
|
Finance and
other non-recurring costs
|
1,714
|
-
|
-
|
-
|
Estimated
tax effect of adjustments
|
1,355
|
(591)
|
(5,437)
|
19
|
Adjusted
net income (loss)
|
(4,376)
|
5,088
|
7,146
|
4,513
|
Adjusted
EPS
|
(0.02)
|
0.02
|
0.02
|
0.02
|
(Cdn$ in
thousands, except per share amounts)
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
Net
income (loss)
|
(5,274)
|
5,095
|
11,762
|
22,485
|
Unrealized
foreign exchange (gain) loss
|
11,621
|
(4,398)
|
(1,817)
|
9,511
|
Unrealized
(gain) loss on derivatives
|
(30,747)
|
7,486
|
4,612
|
(6,817)
|
Estimated
tax effect of adjustments
|
8,302
|
(2,021)
|
(1,245)
|
1,841
|
Adjusted
net income (loss)
|
(16,098)
|
6,162
|
13,312
|
27,020
|
Adjusted
EPS
|
(0.06)
|
0.02
|
0.05
|
0.10
|
NON-GAAP
PERFORMANCE MEASURES - CONTINUED
Adjusted
EBITDA
Adjusted
EBITDA is presented as a supplemental measure of the Company's
performance and ability to service debt. Adjusted EBITDA is
frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in the industry,
many of which present Adjusted EBITDA when reporting their
results.
Issuers of
"high yield" securities also present Adjusted EBITDA because
investors, analysts and rating agencies consider it useful in
measuring the ability of those issuers to meet debt service
obligations.
Adjusted
EBITDA represents net income before interest, income taxes, and
depreciation and eliminates the impact of a number of items that
are not considered indicative of ongoing operating performance.
Certain items of expense are added and certain items of income are
deducted from net income that are not likely to recur or are not
indicative of the Company's underlying operating results for the
reporting periods presented or for future operating performance and
consist of:
-
Unrealized
foreign exchange gains/losses;
-
Unrealized
gain/loss on derivatives;
-
Amortization
of share-based compensation expense; and
-
Non-recurring
other expenses
(Cdn$ in
thousands)
|
2023
Q2
|
2023
Q1
|
2022
Q4
|
2022
Q3
|
Net
income (loss)
|
9,991
|
4,439
|
(2,275)
|
(23,517)
|
Add:
|
|
|
|
|
Depletion
and amortization
|
15,594
|
12,027
|
10,147
|
13,060
|
Finance
expense
|
13,468
|
12,309
|
10,135
|
12,481
|
Finance
income
|
(757)
|
(921)
|
(700)
|
(650)
|
Income tax
expense
|
678
|
3,356
|
1,222
|
3,500
|
Unrealized
foreign exchange (gain) loss
|
(10,966)
|
(950)
|
(5,279)
|
28,083
|
Unrealized
(gain) loss on derivatives
|
(6,470)
|
2,190
|
20,137
|
(72)
|
Amortization
of share-based compensation expense
(recovery)
|
417
|
3,609
|
1,794
|
1,146
|
Non-recurring
other expenses
|
263
|
-
|
-
|
-
|
Adjusted
EBITDA
|
22,218
|
36,059
|
35,181
|
34,031
|
(Cdn$ in
thousands)
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
Net
income (loss)
|
(5,274)
|
5,095
|
11,762
|
22,485
|
Add:
|
|
|
|
|
Depletion
and amortization
|
15,269
|
13,506
|
16,202
|
17,011
|
Finance
expense
|
12,236
|
12,155
|
12,072
|
11,875
|
Finance
income
|
(282)
|
(166)
|
(218)
|
(201)
|
Income tax
expense
|
922
|
1,188
|
9,300
|
22,310
|
Unrealized
foreign exchange (gain) loss
|
11,621
|
(4,398)
|
(1,817)
|
9,511
|
Unrealized
(gain) loss on derivatives
|
(30,747)
|
7,486
|
4,612
|
(6,817)
|
Amortization
of share-based compensation expense
|
(2,061)
|
3,273
|
1,075
|
117
|
Adjusted
EBITDA
|
1,684
|
38,139
|
52,988
|
76,291
|
NON-GAAP
PERFORMANCE MEASURES - CONTINUED
Earnings
from mining operations before depletion and
amortization
Earnings
from mining operations before depletion and amortization is
earnings from mining operations with depletion and amortization
added back. The Company discloses this measure, which has been
derived from our financial statements and applied on a consistent
basis, to provide assistance in understanding the results of the
Company's operations and financial position and it is meant to
provide further information about the financial results to
investors.
|
Three
months ended
June
30,
|
Six
months ended
June
30,
|
(Cdn$ in
thousands)
|
2023
|
2022
|
2023
|
2022
|
Earnings
(loss) from mining operations
|
12,070
|
(8,048)
|
41,182
|
21,219
|
Add:
|
|
|
|
|
Depletion
and amortization
|
15,594
|
15,269
|
27,621
|
28,775
|
Earnings
from mining operations before depletion and
amortization
|
27,664
|
7,221
|
68,803
|
49,994
|
Site
operating costs per ton milled
The
Company discloses this measure, which has been derived from our
financial statements and applied on a consistent basis, to provide
assistance in understanding the Company's site operations on a tons
milled basis.
(Cdn$ in
thousands, except per ton milled amounts)
|
2023
Q21
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
Site
operating costs (included in cost of
sales)
– Taseko share
|
83,374
|
74,438
|
75,806
|
69,920
|
64,237
|
|
|
|
|
|
|
Site
operating costs (included in cost of
sales)
– 100% basis
|
95,285
|
95,838
|
101,075
|
93,226
|
85,650
|
Tons milled
(thousands)
|
7,234
|
7,093
|
7,282
|
8,229
|
7,698
|
Site
operating costs per ton milled
|
$13.17
|
$13.54
|
$13.88
|
$11.33
|
$11.13
|
1 Q1
and Q2 2023 includes the impact from the March 15, 2023 acquisition
of Cariboo from Sojitz, which increased the Company's Gibraltar
mine ownership from 75% to 87.5%.
|
CAUTION
REGARDING FORWARD-LOOKING INFORMATION
This
document contains "forward-looking statements" that were based on
Taseko's expectations, estimates and projections as of the dates as
of which those statements were made. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "outlook", "anticipate",
"project", "target", "believe", "estimate", "expect", "intend",
"should" and similar expressions.
Forward-looking
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the Company's actual results,
level of activity, performance or achievements to be materially
different from those expressed or implied by such forward-looking
statements. These included but are not limited to:
-
uncertainties
about the effect of COVID-19 and the response of local, provincial,
federal and international governments to the threat of COVID-19 on
our operations (including our suppliers, customers, supply chain,
employees and contractors) and economic conditions generally and in
particular with respect to the demand for copper and other metals
we produce;
-
uncertainties
and costs related to the Company's exploration and development
activities, such as those associated with continuity of
mineralization or determining whether mineral resources or reserves
exist on a property;
-
uncertainties
related to the accuracy of our estimates of mineral reserves,
mineral resources, production rates and timing of production,
future production and future cash and total costs of production and
milling;
-
uncertainties
related to feasibility studies that provide estimates of expected
or anticipated costs, expenditures and economic returns from a
mining project;
-
uncertainties
related to the ability to obtain necessary licenses permits for
development projects and project delays due to third party
opposition;
-
uncertainties
related to unexpected judicial or regulatory
proceedings;
-
changes
in, and the effects of, the laws, regulations and government
policies affecting our exploration and development activities and
mining operations, particularly laws, regulations and
policies;
-
changes in
general economic conditions, the financial markets and in the
demand and market price for copper, gold and other minerals and
commodities, such as diesel fuel, steel, concrete, electricity and
other forms of energy, mining equipment, and fluctuations in
exchange rates, particularly with respect to the value of the U.S.
dollar and Canadian dollar, and the continued availability of
capital and financing;
-
the
effects of forward selling instruments to protect against
fluctuations in copper prices and exchange rate movements and the
risks of counterparty defaults, and mark to market
risk;
-
the risk
of inadequate insurance or inability to obtain insurance to cover
mining risks;
-
the risk
of loss of key employees; the risk of changes in accounting
policies and methods we use to report our financial condition,
including uncertainties associated with critical accounting
assumptions and estimates;
-
environmental
issues and liabilities associated with mining including processing
and stock piling ore; and
-
labour
strikes, work stoppages, or other interruptions to, or difficulties
in, the employment of labour in markets in which we operate mines,
or environmental hazards, industrial accidents or other events or
occurrences, including third party interference that interrupt the
production of minerals in our mines.
For
further information on Taseko, investors should review the
Company's annual Form 40-F filing with the United States Securities
and Exchange Commission www.sec.gov
and home
jurisdiction filings that are available at www.sedar.com.
Cautionary
Statement on Forward-Looking Information
This
discussion includes certain statements that may be deemed
"forward-looking statements".
All
statements in this discussion, other than statements of historical
facts, that address future production, reserve potential,
exploration drilling, exploitation activities, and events or
developments that the Company expects are forward-looking
statements.
Although
we believe the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements.
Factors
that could cause actual results to differ materially from those in
forward-looking statements include market prices, exploitation and
exploration successes, continued availability of capital and
financing and general economic, market or business
conditions.
Investors
are cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ
materially from those projected in the forward-looking
statements.
All of the
forward-looking statements made in this MD&A are qualified by
these cautionary statements.
We
disclaim any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except to the extent required by
applicable law.
Further
information concerning risks and uncertainties associated with
these forward-looking statements and our business may be found in
our most recent Form 40-F/Annual Information Form on file with the
SEC and Canadian provincial securities regulatory
authorities.
For
further information on Taseko, please see the Company's website at
www.tasekomines.com or contact: Brian
Bergot, Vice President, Investor Relations – 778-373-4554,
toll free 1-800-667-2114; Stuart
McDonald, President & CEO
SOURCE: Taseko
Mines Limited